Ihh is an intercellular signalling peptide essential for a variety of patterning events during development. It binds to the patched (PTC) receptor, which functions in association with smoothened (SMO), to activate the transcription of target genes. Ihh induces the expression of parathyroid hormone-related protein (PTHRP) and is implicated in endochondral ossification, possibly regulating the balance between growth and ossification of the developing bones.